Morgan Stanley Pledges $1 Billion to Boost Sustainability

Michael J. Moore and Zeke Faux

November 1, 2013 — 8:00 AM EDT

Morgan Stanley said it will invest $1 billion to help improve affordable housing as part of a broader push to encourage investment in efforts that aid economic, social and environmental sustainability.

The bank is also seeking to attract $10 billion of client assets to fund investments designed to provide social benefits in addition to financial returns, New York-based Morgan Stanley said today in an e-mailed statement. Audrey Choi, who leads the bank’s sustainable finance group, will serve as chief executive officer of the newly established Morgan Stanley Institute for Sustainable Investing.

The biggest U.S. banks have sought to combine their abilities of advising companies and allocating capital with socially minded pursuits in the wake of public outrage and government rescues resulting from the financial crisis. Goldman Sachs Group Inc. announced earlier this year that it was investing in so-called social-impact bonds that funded early education in the U.S.

“The most effective solutions to sustainability challenges are those that can be brought to scale,” Morgan Stanley CEO James Gorman, 55, said in the statement. “Our clients are increasingly turning their attention to what it takes to secure the lasting and safe supplies of food, energy, water and shelter necessary for sustainable prosperity.”

Gorman, who spoke about the new initiative today at Columbia University in New York, will serve as chairman of the effort’s advisory board. The institute will also focus on developing new products that have a sustainability-related strategy, and will fund a fellowship through Columbia Business School to promote research on the topic.